A large element of AOL’s business relates to the provision of a
dial-up internet connection facility – a service that is being hit
hard by a consumer drift towards broadband connections.
AOL works hard to retain its customers, but the New York
Attorney General’s office began an investigation into the ISP’s
customer service policies after receiving around 300 complaints
from New York subscribers that the company had ignored their
demands to cancel the service and stop billing.
According to Spitzer’s office, the investigation revealed that
the company had an elaborate system for rewarding employees who
purported to retain or "save" subscribers who had called to cancel
their internet service. In many instances, such retention was done
against subscribers’ wishes, or without their consent.
Under the system, said the Attorney General’s office, consumer
service personnel received bonuses worth tens of thousands of
dollars if they could successfully dissuade or "save" half of the
people who called to cancel service. In addition, for several
years, AOL had instituted minimum retention or "save" percentages,
which consumer representatives were expected to meet.
These bonuses, and the minimum "save" rates accompanying them,
had the effect of employees not honouring cancellations, or
otherwise making cancellation unduly difficult for consumers.
Under the agreement, announced yesterday, AOL does not admit to
any wrongdoing. However it has agreed to reform its customer
service procedures by altering the incentives it offers to customer
representatives who seek to persuade subscribers not to cancel
their service.
In particular, the ISP will remove any requirement that its
representatives maintain a minimum number of “saves” in order to
earn a bonus. It will also record all service cancellation
requests.
Action on the requests will be verified through a third-party
monitor.
In addition, AOL will refund all New York consumers who claim
that they have been affected by the previous cancellation practice,
up to four months worth of service, and it will pay $1.25 million
to the state in penalties and costs.
"This agreement helps ensure that AOL will strive to keep its
customers through quality service, not stealth retention programs,"
said Spitzer.
